of opportunities to improve with it. However, a
lack of investment in technology has become the
new normal in American meteorology even as
forecasters around the globe are moving for ward.
That means that not only are their current
assumptions based on higher-resolution images
from more powerful weather satellites, but future forecasts will be
even better compared to ours thanks to more powerful computers
that process ever bigger batches of data.
To use a corporate IT analogy, it’s akin to U.S. forecasters stuck
on aging laptops with Windows 95 while European forecasters
just purchased a new Surface tablet with all the bells and whistles.
Some scientists are downright ashamed of the state of play be-
tween American meteorology and the forecasting models employed
elsewhere in the world. Clifford Mass, an atmospheric sciences
professor at the University of Washington, wrote a blistering post
on his weather and climate blog just months before Hurricane
Sandy that called the lagging quality of forecasting a “national
embarrassment” that “has resulted in large unnecessary costs for
the U.S. economy and needless endangerment of our citizens.”
Mass contended that America was behind not just Europe
but also organizations in the U.K. and Japan—and that was five
years ago. The intervening time has only made
the situation more pronounced, as the current
annual budget for the National Oceanic and
Atmospheric Administration (NOAA) is $5.6
billion,[ 4] virtually unchanged since 2012.
Even worse than a failure to invest over
previous years is the risk of future cuts that
could make the situation even worse. Thanks
in large part to an unsympathetic view toward climate science,
President Donald Trump is proposing a 16 percent reduction in
funding for NOAA and a 32 percent cut to the weather and climate
agency’s research arm.
Much to the chagrin of meteorologists, the White House even
specifically called out a $5 million budget cut designed “to slow
the transition of advanced modeling research into operations for
improved warnings and forecasts.”[ 5]
Do you think actuaries bring any
unique skills to the climate change
discussion that the typical citizen or
policymaker may lack?
Yes. The phenomena in the ACI—
temperature, precipitation, wind,
and sea level—can be viewed as a
distribution of values, from low to
high, with most values concentrated
near the middle of the distribution.
Most climate discussion focuses on
the average. But it is extremes that
generate losses. Actuaries are skilled
at understanding the probabilistic
nature of these distributions and how
to interpret them.
How has the Actuaries Climate
Index been received, both inside and
outside the profession?
Very well. There have been several
media articles, nearly 20,000 visits to
the website ActuariesClimateIndex.
org, and almost 1,500 downloads
of data. One of the nice attributes
of the ACI is that all the underlying
data is available and can be accessed
by interested parties for their own
review and analysis. The ACI has also
been featured at several seminars
and webinars within the profession
and presented to regulators and to
scientists who are interested in climate
The most recent reading in June set
a new high for the composite index.
Was that a surprise, or not really,
because we are in an established
trend of warmer weather?
While we all read or hear the
news reports of high temperatures
in a specific location or small area,
the ACI looks at a whole quarter of
data from entire regions. It helps
us to focus on the forest and avoid
anecdotal impressions of individual
trees. I expect the index to move up
and down, just as the weather does. A
major reason for publishing the five-
year moving average is to smooth out
Ultimately, what do you hope this
index will help achieve in both the
short and long term?
I hope that the ACI will serve as a
basis for reasoned, factual discussions
of climate change issues. Together
with the forthcoming ACRI, it should
help us to understand the impact of
climate on economic losses, both
insured and uninsured. The indices
should also provide good input to
strategic decisions of insurers, other
risk takers, and allied institutions.
And decisions about land use and
facilities locations, for example,
can be influenced by indications of
rising sea levels or increased wildfire
frequencies, both of which are
The inferior state of weather technology
in the United States and the lack of future
funding will undoubtedly have serious
consequences in the near term—both on
the accuracy of your local forecast and for
organizations where actuaries depend on
weather predictions to do their jobs
and properly assess risk.